In September, we proposed a theory of the Fed and suggested the FOMC will soon worry mostly about financial imbalances without much concern for recession risks. We reached that conclusion by weighing the reputational pitfalls faced by the economists on the committee, but now we’ll add more meat to our argument, using financial flows data released last week.

We’ve created two charts, beginning with a look at cumulative, inflation-adjusted asset gains during the last seven business cycles: